AEIS
Advanced Energy Industries Inc
Price:  
149.68 
USD
Volume:  
290,486.00
United States | Semiconductors & Semiconductor Equipment
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AEIS WACC - Weighted Average Cost of Capital

The WACC of Advanced Energy Industries Inc (AEIS) is 9.2%.

The Cost of Equity of Advanced Energy Industries Inc (AEIS) is 9.75%.
The Cost of Debt of Advanced Energy Industries Inc (AEIS) is 4.40%.

Range Selected
Cost of equity 8.00% - 11.50% 9.75%
Tax rate 8.70% - 11.50% 10.10%
Cost of debt 4.00% - 4.80% 4.40%
WACC 7.6% - 10.8% 9.2%
WACC

AEIS WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.89 1.18
Additional risk adjustments 0.0% 0.5%
Cost of equity 8.00% 11.50%
Tax rate 8.70% 11.50%
Debt/Equity ratio 0.1 0.1
Cost of debt 4.00% 4.80%
After-tax WACC 7.6% 10.8%
Selected WACC 9.2%

AEIS's CAPM model and how its cost of Equity is calculated

The Cost of Equity reflects the return a company needs to deliver to shareholders to justify the risk of investing in its shares. It’s computed using the Capital Asset Pricing Model (CAPM), which blends the risk-free rate, the stock’s beta, and the market risk premium.

This method evaluates the stock’s risk compared to a safe investment and the market’s overall volatility.

Here’s how we figure out the cost of equity for AEIS:

cost_of_equity (9.75%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.89) + risk_adjustments (0.25%)

We include the risk adjustments, which range from 0% to 1%, to keep our WACC conservatives, especially for companies traded in developing markets.